For the first time ever, Myanmar has been host to a regional summit of the World Economic Forum. Despite a variety of problems in the country, pundits expect the domestic economy to expand in the years ahead.
The president doesn’t have any time. Consultants from the UK, Germany, US and EU are waiting outside his office in Rangoon, but nobody has managed to get an appointment. Win Aung is no political president, but chief of Myanmar’s Federation of Chambers of Commerce and Industry (UMFCCI).
The federation supports foreign companies in establishing business contacts in Myanmar, which is also known as Burma, prepares the ground for joint ventures and generally backs the further opening up of the domestic economy.
Capital and jobs wanted
Foreign investors and lenders are a frequent sight in Rangoon and the country’s capital, Naypyidaw. Everyone wants to profit from the predicted 8 percent annual growth. German delegations have also been in the country. A representation of German industry will soon be inaugurated, with some of the red tape already cut through.
Win Aung doesn’t seem overly bothered by the line of people waiting to see him. His office is huge, busy hands are serving tea and jot down every word that’s spoken.
“We have to upgrade our infrastructure,” Win Aung told DW. “We need roads, working telephone lines and the Internet, and we can’t manage all of that on our own.” He said billions of dollars would be required to do the job, and it would require the involvement of big companies to succeed. He also appealed to the Germans to make a contribution.”We really like to welcome the labor-intensive industries from Germany with their technology, market access and capital and would like them to engage with local businesses in Myanmar,” he said.
Textile industry to profit
Win Aung said he believes the local clothing industry has a huge potential, as the country has joint strategic borders with Bangladesh, Thailand and Laos, with the huge markets of India and China are not far away.
Foreign textile producers are about to relocate some of their production facilities in Bangladesh as working conditions there are considered to be partly inhumane and dangerous. This could present a chance to Myanmar.
EU helps establishing standards
Under a scheme codenamed “Smart Myanmar,” the EU executive has supported sustainable consumption and production processes on the ground. The bloc’s representative, Sabine Checkmate, was building up a network of consultants to help local actors stick to internationally agreed standards.
“Working conditions, workers’ safety and environmental issues are very important with German and other European buyers,” she said. “If you do not address those issues as a manufacturer, you will not get the desired market share.”
Checkmate said she was positively surprised at her first factory visit in the country, mentioning proper adjustable tables and chairs, sufficiently lit rooms and fixed breaks. But she added there was no air conditioning despite outside temperatures of between 30 and 40 degrees Celsius (86 and 104 degrees F).
Wages are relatively low by international comparison, with workers in the textile industry taking home between $50 and $90 (38 and 67 euros) per month.
Money in boxes
But just how well-founded is any euphoria regarding Myanmar’s future development? Entrepreneurs, who’ve been on the ground for a while, have deplored the country’s moribund financial system. Among them is Jim Taylor from the United States whose company Proximity produces water pumps for farmers.
“You can only pay cash in this country,” Taylor said. “That is a problem for businesses. There are nearly no ATMs and bank transactions are very complicated, so you have to carry around big stacks of cash.”
Others report that rents have to be paid at least a year in advance, and in cash, of course.
But the biggest problem is energy scarcity. Several blackouts a day are quite common. You can easily find yourself in the dark while visiting a small store in Rangoon. But that doesn’t seem to drive anyone up the wall. People just wait for the generators to start. Using them costs a lot of money and pollutes the environment.
Pyae Sone Oo is a local entrepreneur. Falling back on a start-up capital from his parents, the 29-year-old founded a rice trading firm which among other things fills up bags of rice for the World Food Organization (WFO).
Human resource to the rescue
Inside the firm’s storehouse, temperatures reach 45 degrees Celsius. Young men are filling up 50-kilogram bags with their hands or buckets. Afterwards, they are hauling the bags across the huge storehouse to prepare them for transport. That’s a very cumbersome kind of work. Are there no machines or conveyer belts to do the job?
“We can’t use our machines for packing, because we have had no electricity here in the industrial zone for many days,” says Pyae Sone Oo. “We will probably get four hours a day by next week, but we don’t know yet; we have to read it in the paper.”
Source: Deutsche Welle